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Applying for a mortgage can be a lengthy, nerve-wracking experience. It doesn’t have to be. Sure, there are many steps involved, but if you take the time to understand them, you can maximize your prospects of getting a mortgage. Here are some tips to improve your chances of going from prospective homebuyer to proud homeowner without a lot of fuss.

It starts with being ready financially

The childhood riddle “How do you eat an elephant?” had a simple answer — one bite at a time. Much of the same can be said for getting approved for a mortgage. And no bite or step is bigger than making sure you’re able to buy a home. Ask yourself how much house you can afford and if you have enough money for a down payment. A bigger down payment typically improves your chances of getting a loan and obtaining a lower interest rate. If you can put down 20% of the purchase price for the home, you can avoid having to buy the mortgage insurance that private lenders often require when homebuyers have smaller down payments. 

Take inventory, too, of your income, debts, monthly bills and credit history, and whether you have enough money for closing costs such as taxes, appraisal fees and title insurance.

Improve your credit before applying

Even if you have money for a down payment, a mediocre or poor credit score can hurt your chances for qualifying for a mortgage. But, there are things you can do to improve your credit score, such as paying off your credit cards and checking your credit reports for errors.

Next steps

Once you’ve determined you’re financially prepared to buy a home, you can move on to finding the right mortgage for the home you are eyeing. Financial institutions such as Xceed Financial Credit Union can provide handy resources to guide you through the process in easy-to-understand terms.

  • Find the right lender: It’s always wise to shop around, but bear in mind that credit unions typically have better loan rates than banks.
  • Get preapproved for a mortgage: A preapproval is proof that a lender has reviewed your financial documents — including pay stubs, W-2 forms, tax returns, bank statements, loan and debt information — and is willing to make you a loan, though it’s not an official commitment until you complete a fuller, more detailed loan application process. Getting preapproved lets sellers know that you’re a serious buyer and will be able to make an offer on a home. But, you’re not required to use that particular lender.
  • Choose the right mortgage: A variety of mortgage options — government-backed loan or conventional, fixed-rate or adjustable-rate mortgage, loans with 15-year or 30-year terms — can seem overwhelming. Credit unions such as Xceed Financial can help you choose the mortgage that’s best for you.
  • Submit the application: Here’s where the paperwork comes in. If you use the lender that preapproved you, you’ll have to provide only your most recent financial documents to complete the loan process. If you go with a new lender, however, you’ll need to submit all your financial documents again.  After you’ve turned in the mortgage application, your lender will provide an estimate of how much your loan will cost, including fees and the amount you’ll pay for closing.

The wait

You have successfully maneuvered the steps for applying for a home mortgage. Now, the wait begins to learn whether you’re officially approved.

There are no guarantees, but if you do your homework and get prepared, you will maximize your chances for a successful mortgage approval.

 

Juan Castillo, NerdWallet

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

If you're not loving the monthly payment for your car or truck loan, refinancing could be a great way to save some serious dough. Rates at credit unions tend to be very competitive, and the process is a snap.

Simply contact your current lender to get your loan's payoff information. Then, apply for financing from a new lender that offers a lower interest rate. You'll typically be asked to provide recent account statements, W-2s or other proof of income, and give permission for the lender to run a credit check.  Once approved, the funds are sent to pay off your existing loan, and the title is transferred to the new lender, you can start loving your new low payment!

Money-saving scenario

Suppose last year you financed $25,000 at 8% interest for a five-year car loan. Your monthly principal and interest payment would be about $507. But say today you could refinance the balance (just over $20,000) for the remaining four years at a lower rate of 3%. Your payment would drop to $451. That's a savings of $56 a month, or $2,688 over four years, with the same payoff date.

You could also refinance for a longer loan term. This could reduce your monthly payment and give you more room in your personal budget. If your income drops or you have unexpected expenses, refinancing to a lower monthly payment could be one way to make sure you can pay your bills.

Choose carefully

For all the potential positives of an auto refinancing, there could be some drawbacks. If the new loan pushes your payoff date further into the future, you could end up paying more money overall in interest. Also, any new loan may incur title and registration fees, which vary by state. If you do refinance, don't forget to tell your insurer.

There could also be costs to get out of your old loan. If you have a prepayment penalty, or the lender requires you to pay all remaining interest upfront, it would reduce your savings from refinancing.

Some car loans are “frontloaded” so your monthly bill mostly pays for interest during the first part of the term. If you've had your existing loan for a few years, your remaining payments would mostly go toward principal. That means that refinancing, even at a lower rate, may not save you enough to justify the cost.

Be sure to add up all the fees for paying off your old loan. Then, compare that amount to how much you'd save with a refinance, and see whether the benefits outweigh the costs.

An auto loan refinance can be a smart move in the right situations. By receiving a lower rate, you could cut your interest costs, reduce your monthly payment and save big.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

If you have high-interest credit card debt, transferring your balance to a card with a lower interest rate could save you money and help you pay down the debt faster. But the initial APR, or annual percentage rate, isn’t the only thing you should consider before a balance transfer. Here are three factors to weigh when finding the best deal. 

1. Watch for high annual fees. Make sure the new card doesn’t have annual fees higher than those you’re currently paying before initiating a balance transfer. A higher fee could wipe out any savings you’d receive from a lower interest rate, and a recent credit card rewards study by NerdWallet found that 31% of consumers who have rewards cards with annual fees don’t know how much the fees are.

Some financial institutions, such as Xceed Financial Credit Union, offer credit cards with low or no annual fees.

2. Calculate upfront fees. Many balance transfer offers require a one-time transfer charge of around 3 or 4% of the amount transferred. So, if you want to move $10,000 from a high-interest credit card to a lower interest card that charges a 3% transfer fee, you’d pay $300.

Transfer fees are common, but try to minimize what you pay. Some credit unions, such as Xceed, cap balance transfer fees at $100.

3. Find out what your interest rate will be after the promotional period. Some credit cards offer temporary promotional APRs on balance transfers that can be as low as 0%. But if you don’t pay the balance before the promotional period ends, the remaining amount on the card will be billed at the standard APR. 

Research a card’s standard APR before you transfer your balance. A card with no promotional rate but a low standard APR could be a better deal than one with a low promotional rate but a higher standard interest rate. You could also consider transferring credit card debt to a consolidation loan, which has a fixed rate and fixed monthly payment.

A balance transfer can help you pay off your high-interest credit card by shifting the balance to a card with a lower interest rate. But make sure you understand all of the costs before signing up for one. That way, you’ll be better informed about whether a credit card transfer is the right choice for you.

Margarette Burnette, NerdWallet

© Copyright 2015 NerdWallet, Inc. All Rights Reserved

August 5, 2015 (as reported by CUNA)

YONKERS, N.Y. (8/5/15)--Consumer Reports named credit unions recently as the industry with the most outstanding customer service nationwide.

Other respected business rankings have put credit unions on top for trust and service as well--the American Customer Satisfaction Index, Harris Poll, Temkin Group and Chicago Booth/Kellogg School Financial Trust Index among them.

Clocking in with a top score of 90, credit unions outranked banks, auto insurance companies and brokerage firms, which were among the 22 industries rated through reader polls.

Scores were based on how highly each respondent graded aspects of the care they experienced with each particular industry.

CUNA President/CEO Jim Nussle said, “This is great recognition for the service that the nearly 250,000 employees of the nation’s nearly 6,300 credit unions provide every day to our more than 100 million members and reaffirms for me the value of our member-owned cooperative structure.”

In addition to credit unions nabbing top honors in general, the report also named the three credit unions that demonstrated the highest levels of service, including SchoolsFirst FCU, Santa Ana, Calif., Wings Financial CU, Apple Valley, Minn., and Randolph-Brooks FCU, Live Oak, Texas.

Since we all know what the other certainty in life is (death), maybe we shouldn’t be all that upset about the onset of tax season, right? And while it may seem that the tax code gets more complicated every year, the good news is there are also a lot more tools now than ever before to streamline the process of tax preparation and make sure you complete your return correctly. Here are a few tax hacks to dial down the pain.

Tax Software to Simplify Filing: You’ve probably heard of Turbo Tax – it’s the market leader in tax prep software, but it’s not the only option. If your adjusted gross income is $60,000 or less (which is the case for the overwhelming majority of filers), you may qualify for free software to file your federal return. Go to the IRS website’s Free File page to learn more. Different companies have different eligibility criteria to get the freebie, so you’ll be asked to answer a few questions to match you with the right commercial tax software. And remember, not all of the IRS’ partner companies offer free state tax returns, so be sure to check those details before proceeding.

IRS Mobile App: Some filers may also qualify for free tax preparation assistance, and you can use the IRS mobile app – IRS2GO – to find IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) sites. You can also use the app to subscribe to tax tips from the IRS, follow the IRS on social media, and connect to other online tools from the IRS. And once your return is filed, if you have a refund due, the app will let you check your refund status simply by entering your Social Security number, filing status, and the refund amount you’re expecting. It’s a basic app, but useful.

If You Itemize, Try Expensify: Unless you have a lot of deductions, you’ll probably come out ahead by taking the standard deduction. But you don’t know until you add it up. And remember, even if you use a software program that does the math for you, the program is only as good as the information you input. So, if you have a lot of expenses that might be deductible – for things like mileage and business travel – vow to ditch the scraps of paper and try an app like Expensify to help to keep you organized next time around.

Finally, few things will trigger an audit faster than failing to report all of the income that’s been reported to the government under your Social Security number. You’re not likely to forget income noted on the W-2 you get from your employer, but be sure to also include other sources of income throughout the year, like freelance work, unemployment compensation, scholarships, and prize winnings such as gambling and lottery winnings.

Expecting a substantial income tax refund this year? If so, you are in the majority - over 70 percent of Americans get money back at the end of the tax year, with the average refund being close to $2,000. Rather than having those precious dollars being absorbed into your normal spending routine, get the most out of your cash.

  1. Pay down high interest loans and lines of credit. With average annual interest rates for credit cards and personal loans hovering around fifteen percent, paying off that Visa card before making other investment decisions makes good sense.

  2. Fund Your Retirement Account. About 30 percent of all working Americans have no money invested for their retirement. If you are one of them, seriously consider making a contribution to an IRA contribution right away.

  3. Invest it. Instead of just working for money, let money work for you. If you invested one lump sum of $1,500 in the stock market, over thirty years at 12 percent interest (the 30-year market average) you'd have $ 53,924. (Do your research first before making any investment decision, of course.)

  4. Open an emergency account. Most Americans don't have money set aside for those financial emergencies that always seem to happen when there is no cash in the coffer. A large tax refund is a great start an emergency account. It should eventually total between three to six months worth of essential living expenses. 

  5. Pay for repairs. Maintaining expensive possessions now will result in dollars saved tomorrow. Use the money to repair that leaky roof before it develops into a bigger problem; replace those dangerous bald tires with new, safe ones.

  6. Start a personal endowment. Investing in your emotional, physical, intellectual, and career growth is a wise use of money. Whether it's paying for a gym membership or a cooking class, you'll feel effects of this type of investment fast. 

  7. Make an extra home mortgage payment (or two). Though you won't feel the benefit immediately, doubling up on a mortgage payment now can save you months of mortgage payments later. 

  8. Donate to a charity. Giving back to the community is a wonderful way of supporting a cause that you are passionate about. Even better - in many cases at least a portion of your donation is tax-deductible too. 

  9. Open a 529 College Savings Plan. A four-year college education can cost upwards of $100,000. Save for your child's college education with a 529 plan. It works much like a Roth IRA, and withdrawals are completely tax-free when used for higher education purposes. 

  10. Plan a vacation. If you are in a fluid financial position, and can truly afford a bit of luxury, do something you've been dreaming of. Money is to be enjoyed as well as earned, saved, and invested. Go ahead. Book that cruise.

Although all the preceding ideas are excellent uses for a lump-sum amount of cash, remember that instead of planning for a refund, it's best to come out even. A tax refund is an interest-free loan to the government, and money that is not in your pocket every month. If you have been getting a refund back each year, consider changing your withholding exemptions so less tax is withheld from each paycheck. While a tax refund may feel like a gift from Uncle Sam, it's not - it's money that you have overpaid on your income taxes.

Repaying student debt is one of the most daunting financial tasks many of us will ever face. On top of the magnitude of the debt, feeling like you don’t know your options for repayment can add to your frustration. To try to relieve at least a bit of the stress, below is a straightforward guide to the options you have for repaying your student loans.

Types of loans

  • Public (sometimes called federal loans) - The government is either the lender or guarantor of the funds
  • Private - A non-governmental financial institution provides the loans

Major federal student loan programs

  • William D. Ford Federal Direct Loan Program - Offers Stafford and PLUS loans
  • Federal Family Education Loan (FFEL) Program (no longer offered after June 2010) - Offered both Stafford and PLUS loans
  • Federal Perkins Loan Program

When do you need to start paying?

  • Stafford loans - 6 months after graduation
  • Perkins loans - 9 months after graduation
  • PLUS loans - 60 days after funds disbursed or 6 months after graduation if you receive a deferment
  • Private loans -Confirm with your lender

Repayment Plans

For FFEL and Direct loans

  • Standard - Fixed payments for 10 years
  • Graduated - Payments start off lower than increase, 10 years but can be combined with extended
  • Extended - Fixed payments for up to 25 years
  • Income-contingent (Direct only) - Based on income, can be extended, forgiven after 10 or 25 years
  • Income-sensitive (FFEL only) - Based on income, 10 years
  • Income-based - May be able to get lower payment than under other plans, can be extended, forgiven after 10 or 25 years

For Perkins loans - There are no alternative repayment plans for Perkins loans, but your school can extend the repayment period due to extenuating circumstances.

Consolidation

  • You can combine all, some, or even one loan.
  • You do not have to be current on payments to consolidate.
  • You cannot add private loans to a federal consolidation loan.
  • You can add federal loans to a private consolidation loan but you may lose certain rights afforded to those with federal loans.

Loans can be cancelled or reduced if:

  • You become permanently disabled
  • Your school closes or is determined to be falsely certified
  • You volunteer with a designated public service organization, join the National Guard or accept a specific type of teaching position

What to do if you can't pay

Seek a deferment with your lender

  • Temporary suspension of payments
  • Interest suspended on subsidized loans
  • Can be obtained if enrolled in school, disabled, unemployed, or in armed forces

Seek forbearance

  • Temporary suspension of or reduction in payments
  • Interest still accrues
  • Can get if monthly payment high or have unforeseen personal problems
  • Easier to get

Possible consequences of default (over 270 days past due)

  • Tax refund interception
  • Wage garnishment
  • Ineligibility for deferment, alternative repayment plans, grants, and new student loans
  • Credit report damage
  • Collection activity, for which there is no statute of limitations

Getting out of default

  • For federal loans, you have a one-time right to get out of default with a reasonable and affordable repayment plan
    • Loan rehabilitated after 9 on-time payments
    • Default notation removed from credit report
  • You can also consolidate to get out of default
  • Usually student loans cannot be discharged in bankruptcy

For help

  • Federal Student Aid Information Center/Student Aid on the Web 
    Provides information on federal student loans 
    800-433-3243 
    www.studentaid.ed.gov
  • Direct Loan Servicing Center 
    Allows borrowers with Direct loans to make payments online and manage their account 
    800-848-0979 
    www.direct.ed.gov/
  • Department of Education’s Default Resolution Group 
    Provides information on defaulted student loans 
    800-621-3115 
    www.myeddebt.ed.gov/

Buy new, buy used, or lease? These are just a few of the many decisions you’ll need to make before happily driving away with a vehicle. While shopping for a car or truck is exciting, it is also no simple matter. You can avoid buyer’s remorse by making important financial and practical decisions before signing on the dotted line.

By reviewing the pros and cons of buying and leasing, how to analyze and determine your personal requirements, how to get the best purchase price and financing deal, and the laws that protect your rights as a consumer before you shop, you can be sure to make the right choice.

Some Things to Consider

Shopping for a car can be complicated and time-consuming. It involves balancing your desires with your economic reality, deciding whether to buy or lease, and knowing what is the best deal for you. To make the process efficient and improve your chances of driving away happy, you will need to consider:

  • Your Needs – Think about your transportation requirements. Does your car need to be large enough for a family of five, or small enough to fit in tight city parking spaces; tough enough to haul firewood, or chic enough to drive clients around?
  • Your Wants – Your desires certainly play a part in the car buying decision. Make, color, options, and style are all important to being happy with your final choice. Read car-oriented magazines and websites for ideas.
  • Your Budget – It is easy to get carried away and end up with a car that is out of your price range and a monthly payment beyond your capacity. Your budget, not a salesperson’s opinion, should dictate your decision. Review your income and expenses to see what you have available each month for auto expenses.

Save For a Down Payment or Total Car Cost

While it is possible to buy a car with no money down, you will end up paying a lot more for it if you do so. The more you borrow, the more the car will ultimately cost.

To decrease the amount you finance, it is wise to make a significant down payment. With enough savings, you may be able to purchase a car outright (typically an option when buying a used car, rather than a new one).

Effective saving begins with first determining how much you want to save, then setting a reasonable date to achieve your goal. Use automatic deduction to make the process easy. Arrange with your financial institution to have a set sum deducted from your checking account and automatically deposited into savings.

Download pdf for more information

Preparing financially for retirement for many people is a shot in the dark: just save as much as you can and hope it’s enough. It’s understandable that people take that view. After all, it can feel like there are too many variables to even get a grip on. How do you know how much money you will need? How do you know how much income you will have each month? If you can start to get a better handle on these numbers by completing a retirement budget, you can take a big step toward creating a time that will be truly relaxing and low-stress. It’s best to do a retirement budget at least five years before retiring, but there is never a bad time to take a close look at the figures.

Here are some considerations to keep in mind when you are completing your projected budget:

Think about what your retirement will look like

One of the most of important exercises of this entire process is to actually take the time to think about what your retirement will involve. Will there be a lot of lazy days in a hammock? Or do you see yourself on the go a lot, traveling to new destinations? Write down some of the goals you have for your retirement. Visualizing your future lifestyle will help a lot in creating a realistic forecast of which of your expenses will go up and which will go down in retirement.

Examine your current expenses first

Before you can estimate what you will be spending in retirement, you need to have a realistic assessment of what your costs are now. Track your expenses for a month to give yourself a baseline figure. A tip: Putting all your charges for a month on a debit card or credit cards gives you an automatic record of where your money has gone.

Determine your expenses in retirement

This is where that list of current expenses comes in handy. Not only does it give you a jumping off point for determining your future expenses, but it also helps you start to identify some of the expenses you can cut in retirement. A tip: Insurance needs and costs can change dramatically with the onset of retirement, so make a note to contact your agents to discuss your potential for future savings.

Remember to include all sources of income

There are many ways people earn income in retirement, including employer retirement plans, individual retirement plans, pensions, annuities, investments and part-time jobs. Be sure to include all of these in your budget figures. A tip: Call any former employers you believe may have put money in a retirement account or pension on your behalf.

Give the budget a test run

One way to see if your retirement budget will be livable is to try to stick to it for a month or two. Track all your expenses and see if you are able to stick to what you have projected.

Do multiple budgets if necessary

There may be events happening during retirement that will change your financial situation. For example, you may pay off your house. Or you might feel like you want to work part-time for five years and then fully retire after that. Or maybe you will receive a sizeable inheritance. Don’t be afraid to do two budgets, or even more if you think there will be multiple life-changing events.

Take advantage of free calculators

With factors like inflation and compound interest affecting your future numbers, it can feel nearly impossible to calculate what your money will be worth or what things will cost at the time of your retirement. Visit www.balancepro.net for financial calculators to help you get a clearer picture.

Decide when you will retire

One simplified way to determine when you have enough to retire is when the amount you will be able to have in monthly income meets what you project for monthly expenses. If you aren’t there yet, consider ways to amass more money for your retirement. A tip: If you are trying to max out your Social Security benefits, there is a calculator at www.ssa.gov that shows how much you will receive based on what year you retire. You can adjust the numbers to see what timeframe works best for you.

Get help

This is a big task to take on by yourself. Contacting a financial counselor, certified financial planner and/or tax professional can help you check your work and get fresh ideas for making the most out of your money.

Chapter 1: Common Practices

Your wallet is missing. Thousands of dollars have been charged to your credit cards, your checking account is empty, and loans you never took out appear on your credit report. What happened? You’ve been a victim of identity theft – an increasingly common and inventive crime.

Identity theft occurs when someone uses your personal information to commit fraud or other crimes. It may also involve computer fraud, mail fraud, wire fraud, and financial institution fraud.

Fortunately, there are preventative measures you can take to substantially reduce the chance of identity theft occurring, as well as steps to recover from any damage if you are a victim.

Download pdf for more information

Introduction

Buying a home is at once an exciting and challenging venture. With commitment, planning, and learning, you can become a successful homeowner. This mini-site covers everything you need to know to start the homebuying process off right, including:

  • Preparing for Homeownership
  • Understanding Mortgages
  • Getting a Loan
  • Searching for a Home and Making an Offer
  • Closing and Tax Benefits

Chapter 1: Preparing for Homeownership

Saving

The first step to homeownership should ideally begin well before you purchase a home – saving. There are several things you may want to save for, including:

  • The down payment: In the past, homebuyers needed to put down at least 20% of the purchase price to get a mortgage. Today, you may be able to buy a home with as little as 0-5% percent down (although 100% financing can be extremely hard to find). If your down payment is less than 20%, you may be required to purchase private mortgage insurance or get a second mortgage at a higher interest rate.
  • Closing costs: Closing costs are the fees required to obtain a mortgage and transfer ownership of the home, such as attorney costs, an appraisal, title insurance, a recording fee, points, and a loan origination fee. You may have to pay the fees yourself, although sometimes the seller will pay them or you can have them financed (included in the mortgage)
  • Post purchase reserve funds: You may need to show the lender that you will have savings left over after you purchase the home. This provides assurance that the mortgage can be paid even if you are experiencing cash flow problems. At least three months’ worth of mortgage payments is a good amount to have in reserve.
  • Extras: If you plan to buy a fixer-upper, appliances, or new furniture, include these costs in your savings plan.

Credit scores

In order to get a mortgage, especially one with a low interest rate, you usually need to have a good credit score. The most common scoring model is the FICO score, issued by Fair Isaac Corporation. Scores range from 300-850 – the higher, the better. Your score is calculated using data from your credit report, which is compiled by three bureaus: Equifax, Experian, and TransUnion. A lender may check your score from all three bureaus or only one. Many lenders require a score of at least 680 to get a mortgage, and those with a score in the mid-700s and above usually get the best interest rates. If your score is lower than 680, you may only qualify for sub-prime loans, which usually have a high interest rate, or find it difficult to get any loan.

The following are the factors used to calculate your credit score:

  • Payment history (35%): If you make a late payment, your score will take a hit. The more recent, frequent, and severe the lateness, the lower your score. Bankruptcies, judgments, and collection accounts have a serious negative impact.
  • Amounts owed (30%): Carrying high balances on revolving debt (like credit cards) and personal loans, especially if the balances are close to the credit limits, will lower your score.
  • Length of credit history (15%): The longer you have had your accounts, the better.
  • New credit (10%): Having recent inquiries and opening new accounts can lower your score. However, all mortgage or auto loan inquiries that occur within a short period of time are considered just one inquiry for scoring purposes, and you accessing your report does not affect your score.
  • Types of credit used (10%): Having a variety of accounts, such as credit cards, retail accounts, and loans, boosts your score.

Reviewing your credit report regularly is a good idea, but it is a particularly important to do so before seeking a mortgage. Even if you always make your payments on time and have a low level of debt, your credit report could contain score-lowering errors. Check your report at least 60 days before you plan to apply for financing, as it can take some time to resolve issues.

You can obtain your credit report from Experian, Equifax, and TransUnion free once a year through the Annual Credit Report Request Service. (Contact information is in Chapter 5.) Scores can be purchased for a fee. If you see any errors on your report, send a dispute letter to the relevant credit bureau(s) indicating which information is incorrect. They must investigate your claim and remove unverifiable information.

If your score is below the 680 mark, don’t despair. There are many things you can do to boost it:

  • From this point forward, always make your payments on time.
  • Repay collection accounts.
  • Pay down your debt. Keep balances under 40% of the credit limit.
  • If you already have 2-4 accounts open, avoid opening further accounts.
  • Keep older accounts active.
  • Avoid excessive credit applications.

Download pdf for more information

Chapter 1: What Are Your Financial Goals?

If you had to choose between sitting down at the kitchen table and setting goals or sitting on the beach in the Caribbean, you would probably choose the beach. But how would you pay for the airfare? Hotel? Food? Souvenirs?

Goal setting in and of itself may not be exciting and fun, but it helps you to save for and achieve exciting and fun things, as well as things that may not be as exhilarating but are still pretty important (such as having enough money for retirement or a child’s college education). You could just wait and see what is left over at the end of the month after you pay your bills, but since it is easy to get in the habit of spending what you make, you may wind up having no savings if you take this approach.

Even if you are putting money in savings, how do you know if it is enough to get what you want when you want it by? By taking the time to think about what your goals are, how much they cost, when you want them by, and what your regular obligations are, you will know exactly how much to save each month and if you need to make changes to your budget so that you can both reach your goals and pay your bills with ease.

The first step in achieving your financial goals is, not surprisingly, determining what your goals are. For right now, just think about the goals themselves and when you want to achieve them by – don’t worry about the cost. Do you want to buy a new computer in a year? Have a down payment for a house in four years? Be debt free in five years? List your goals and timeframes in the Financial Goals Chart:

Once you figure out what your goals are, you can then calculate how much you will need altogether and what you should set aside each month. How you do this depends on whether it is a short-, mid-, or long-term goal.

Download pdf for more information